OTIS
Otis Worldwide Corporation
$70.15
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 33.6% above fair value
You pay
$70.15
Bear
$42.00
Fair
$52.50
Bull
$63.00
Bear
$42.00
-40.1%
$3.50 × 12x P/E
Fair
$52.50
-25.2%
$3.50 × 15x P/E
Bull
$63.00
-10.2%
$3.50 × 18x P/E
Adjust Assumptions
15.0x
3.5$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
20.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (15 analysts)
$88.67
Divergence from AlphaVal
41%
Summary
Applying a 15x P/E to adjusted EPS of $3.50, the base-case value is $52.50 per share.
Warnings
Wall Street's average price target is $88.67 (from 15 analysts). Our estimate is 41% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples